“Almost everyone on both sides of the debate uses the term “collective bargaining rights” to mean the right of a union to bargain with an employer who must, by law, bargain in good faith. It also includes the right of a union to negotiate even for employees who don’t want to be members of the union and don’t want to pay dues to the union. So “collective bargaining rights” really mean the power to force others–to pay the dues and/or to join the union and/or to give up their power to negotiate with an employer. So the alleged right is really the “right” to monopolize the supply of labor to an employer. That’s a phony right, not a real right. It’s really a power.” — David Henderson

10 Responses to “Quote Of The Day”

Here’s where I think we can see the difference between my world of practical consequences and your world of theory.

Shouldn’t a person be free to negotiate with an employer without compulsion of an outside entity that wants to negotiate on his behalf? Seems so. Compulsion carries a presumption against it. Compulsion needs to be justified.

But it can be in this case. Here’s the reality. The position you find yourself in with an employer is one of disproportionate power. Say you are working for a TV manufacturer in Mexico. You can say you are free to take the job or leave it. It’s $1.54 an hour. But suppose subsidized US corn has destroyed your farm and you lack skills. Are you really free? You can take the job or starve. Is that a free choice? He doesn’t care if you reject it. He’ll find someone else a little more desperate, play on off of another, and he’ll maximize profits.

The alternative to that of course is to bargain as a unit. If you don’t set up the rules such all must join then your lack of joining harms me if I’m working for the same person. What the employer does is he picks off one at a time until the union is destroyed. Then he can go the whole play one off the other to the brink of starvation game.

History shows that under conditions where employees are deprived of collective bargaining corporations do what comes natural. Play one person off the other to drive down wages. It’s not moral or immoral. It’s just the nature of a corporation. What is the effect on society? We can see what it is. We’ve seen all the productivity gains going in to the pockets of the super rich only over the last 30 years, ever since Reagan told private industry he would not enforce the labor laws.

You of course don’t agree with that. You think immigration explains the gap between rich and poor. But let me ask this question. Suppose I was right. Suppose financialization of the economy and Reagan-esque dismantling of private sector unions lead to the expanse in inequality that we see. Also the dip in GDP, which was growing much faster in the 40’s through 70’s as contrasted with the 80’s through now. Suppose that strenghthening unions returned us to a state where growth was across the income spectrum, not just in the hands of the super rich. Would you support unions then? Or would you still oppose them on the theoretical ground that compulsion was wrong? In other words, which matters more. Theory or the real world consequences of the policies.

Bargaining as a unit only works if everybody gets employed – which really cant happen. Especially if you add in the higher demanded wages. So then what benefits the few, harms the unemployed. So even in your world, there are serious victims.

And this is without even including the fact that the company can just relocate. Cheap labor is plentiful.

Regarding inequality: Your hypothetical only works if you ignore economics. I cant do that. Even in explaining inequality, I take the standard view of its causes, see here. And none of that really involves Reagan’s war on labor. You live in la la land Jon. I dont really get into it with creationists, or those who dont take economics seriously. Not my thing (not saying you are wrong…just not my thing). I prefer to stay within “debatable” boundaries.

Where were the victims in the 40’s through the 70’s, which is the golden age of the American economy where unions were strong and taxes were more progressive? You say it harms the poor. Any evidence to justify the assertion? Seems the poor were doing fine back then when supposedly unions are harming them. Why don’t we see that in the historical record?

Sure the company can relocate. If tariffs aren’t permitted. In a financialized setup. That’s a post Bretton-Woods phenomenon. Not so easy when they’re told that if they leave they can stay gone and not ship their products here, or when short term gain is all that counts in a day trading world. But again that’s the post 70’s world where growth dropped off and inequality soared.

You’re once again arguing what is not in dispute with the “standard” view of inequality, a view I share. The question is not “Why is there some inequality?” The question is, why has inequality expanded over the last 30 years, when working hours for the bottom rungs are up, when productivity is up, but the gains fall into the pockets of only the wealthy few.

And you didn’t answer my question I see. That’s just routine at this point.

I’ve already told you repeatedly: immigration (in general, racism and sexism). Immigration restrictions were a BIG PART of the 40’s to 70’s economy. You cant have an economy like that now…atleast not with our levels of open immigration. Economists from all sides of the isle have said the same thing. Here is Paul Krugman on it, for example, an economist you often quote approvingly:

On the other side, however, open immigration can’t coexist with a strong social safety net; if you’re going to assure health care and a decent income to everyone, you can’t make that offer global.

Regarding income inequality: It also specifically addresses the rise in income inequality since the 1970’s as well. Look at the dates. They look at contributing changes from 1970 to today(for example, immigration, education, technology etc). And nowhere do I see Reaganomics.

Regarding your question: If you can show me an economic model, with some real world examples, that leads to a better standard of living, I will change my mind, yes. But I have yet to see you do that.

I know you already told me what you think about immigration being the cause of inequality. I explained in my opening comment that you think the cause is immigration. I’m just saying that your point about the “standard” causes has nothing to do with the dispute. I’ve always agreed that these causes are real. It has nothing to do with the debate. The debate is about the increase in inequality since the mid-70’s, which you attribute to immigration. Bringing up the fact that people that work more make more is irrelevant.

But thanks for answering my main question. So we can agree on this. Forcing others to join the union initially sounds like it would be wrong, but if it were the case that it produced better overall outcomes (I would argue that it does) then it would be justified. We’re making progress.

Jon your whole argument is flawed because you start with workers being forced to do something because of government subsidies. Why did the government subsidize the corn? So what it really is, is the United States creating leverage by creating a scenario of desperation. Education and experience really is the key to escaping poverty, because now you have something that is valuable to a company giving you a better bargaining position.

Another way to look at the difference between “practical consequences and the world of theory” is that HP ares enough about the issues to understand the simplest economic models. This gives him the ability to look at a statement like “an employer has disproportionate power” and call it for what it is. So long as a person has a skill valued by more than one employer it isn’t at all clear that one party has more power than the other.

You seem to prefer to listen to some propaganda, look at a time series or poll data, assume that correlation is the same as causation and repeat the propaganda you heard.

Jon, you claim that stong unions correspond to higher growth in the US. Do you realize that the last 10 years have been thebest ever? Doesn’t the rest of the world matter? It seems like it does matter to you, but only when it supports your rhetorical point.